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Date: Wednesday 20 Aug 2008

LONDON (ShareCast) - There was a small increase in the amount of money lent to homebuyers last month, but the annual figure is still down well over a quarter on the same time last year.

Gross mortgage lending rose 5% to £24.8bn in July, but dropped 27% over the year, according to figures from the Council of Mortgage Lenders.

“While there was a small month-on-month increase in activity, it represented a notable decline from a year ago,” said CML’s head of research Bob Pannell.

“This continues the weaker picture seen in June and points towards the more subdued levels of lending we are likely to see in the second half of 2008.”

The credit crunch has made lenders far more careful about who they lend money to and falling house prices have put many people putting off moving house.

A report from property website Rightmove earlier this week revealed that sellers have knocked almost £5,500 off the asking price of the average property in the past month.

The average asking price for a house dropped 2.3% to £229,816 from £235,219 a month ago, taking the annual fall to 4.8% from 2% in July.

London suffered the biggest drop, down 5.3% to £379,162, a whopping £21,000 less.

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